litigation trends

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As I have noted in several recent posts, plaintiffs’ lawyers seem to have a renewed interest in trying to pursue securities class action lawsuits against companies that have experienced a data breach. Just to cite one recent example, as discussed here, within a day of Marriott’s recent high-profile announcement of a data breach involving its Starwood unit’s customer database, plaintiffs’ lawyers filed a securities class action lawsuit against the company. While plaintiffs’ lawyers may be drawn to these data breach cases, the cases may or may not prove to be successful for them. For example, in a recent ruling in the data breach-related securities class action lawsuit filed against PayPal late last year, the court granted the defendants’ motion to dismiss. The ruling highlights many of the problems plaintiffs’ lawyers will have in trying to pursue these kinds of cases. Northern District of California Judge Edward Chen’s December 13, 2018 ruling in the case can be found here.
Continue Reading Dismissal Motion Granted in PayPal Data Breach-Related Securities Suit

In several recent conversations, I have been asked whether I thought that the whole #MeToo movement might have more or less played out, and that we might not be seeing as many, or even any, more D&O claims based on underlying allegations of sexual misconduct. In response, I said that I didn’t think the phenomenon had played out but I did suggest that I thought that the phenomenon might be shifting and that the kinds of underlying allegations would change. Although it does not represent exactly the kind of thing I had in mind, a new securities class action lawsuit filed against Teladoc Health and based on alleged misconduct of one of its senior executives does at least represent a variant on the kinds of D&O claims following in the wake of allegations of sexual misconduct.
Continue Reading Securities Lawsuit Filed Based on Reports of Alleged Inappropriate Office Relationship

Bill Boeck

As most readers undoubtedly are aware, the EU’s General Data Protection Regulation went into effect on May 25, 2018. Even though the regulation has only been in effect for a few months, regulators across Europe have already starting levying fines under the regulation’s provisions. In the following guest post, Bill Boeck takes a look at the fines that have been imposed so far and considers their implications. Bill is currently Senior Vice President and Insurance and Claims Counsel with the Lockton Companies.  He is Lockton’s global leader for cyber claims and for the development of proprietary cyber wordings and endorsements.  Bill also leads Lockton’s US financial lines claims practice. A version of this article previously was published on the Lockton Cyber Risk Update Blog. I would like to thank Bill for his willingness to allow me to publish his article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Bill’s article.
Continue Reading Guest Post: What Can the First GDPR Fines Tell Us?

When news of the recent massive data breach at Marriott began circulating late last week, a colleague emailed and asked me how long I thought it would take for a D&O lawsuit to be filed. I emailed back that I thought there would be a securities class action lawsuit before the end of business on Monday (December 3). Turns out, I didn’t give the plaintiffs’ lawyers nearly enough credit for haste. The plaintiffs’ lawyers managed to file a securities class action lawsuit against the company on December 1, 2018, just one day after Marriott announced the breach. The lawsuit is the latest example both of a data breach-related D&O lawsuit and an event-driven securities suit, as discussed further below.
Continue Reading Marriott Hit with Data Breach-Related Securities Lawsuit

Late last month, Lion Air Flight 610 crashed into the Java Sea shortly after its takeoff in Jakarta, killing all 189 passengers and crew members on board. As details about the doomed flight have emerged, investigators have raised questions about the possible malfunction of new flight control features on the Boeing 737 MAX 8 jet involved in the crash, as well as about Boeing’s documentation and training relating to the flight control features. Under these circumstances, the possibility that there might be litigation is hardly surprising. What might be less obvious is that the litigation against Boeing relating to the crash might involve a securities class action lawsuit.
Continue Reading First The Plane Crash, Then The Securities Lawsuit

The Northern California wildfire known as the Camp Fire – reportedly the deadliest and most destructive wildfire in California history – has finally been fully contained. But while the fire has been doused, the fight about the fire has only just begun. Investigators will now undertake to determine the fire’s cause. And the inevitable lawsuits will now get rolling as well.

As I noted last week, investors already filed a wildfire-related securities class action lawsuit while the fires were still burning. And now a shareholder has filed a shareholder derivative lawsuit in federal court against the board and certain officers of PG&E Corp., and its regulated utility operating company, Pacific Gas and Electric Company, relating to the companies’ alleged role in causing the Camp Fire. As discussed below, this recent lawsuits may represent examples of the kinds of lawsuits we may expect to see in increasing numbers as a result of climate change-related effects. The derivative lawsuit complaint, filed in the Northern District of California on November 21, 2018, can be found in two parts here and here.
Continue Reading Further Wildfire-Related Management Liability Litigation: Harbinger of Things to Come?

The recent massive wildfires in California have caused the loss of dozens of lives, and many more people are missing. Thousands have been displaced and many millions more have been affected. The property damage has been devastating. The Camp Fire in Northern California alone has destroyed tens of thousands of 10,000 homes and businesses. Even as the fires raged, questions surrounding the fires’ causes were raised. Media stories have circulated raising the possibility that the electric utilities may be to blame for starting the fires. There undoubtedly will be substantial inquiries and perhaps even liability proceedings. Now it appears that the accountability process may not only include efforts by property owners and survivor and loved ones to recoup their losses, but it may also include securities lawsuits by utility company investors who claim they were misled about the company’s fire safety readiness and potential liability exposure.
Continue Reading First, Wildfires. Then What? Securities Litigation, Of Course

In June 2017 when the U.S. Supreme Court entered its opinion in California Public Employees Retirement System v. ANZ Securities, in which the Court affirmed the Second Circuit and held that Securities Act of 1933’s three-year statute of repose is not subject to equitable tolling, one question that was asked was whether the Court’s ruling would encourage more securities suit class members to file protective actions before the statutory period expired in order to preserve their right to opt-out of the class action.

Recent developments in a securities class action involving VEREIT, a real estate investment trust and successor-in-interest to the troubled American Realty Capital Properties, in which VEREIT has entered three opt-out settlements with large institutional investors totaling a whopping $217.5 million, suggest that the concerns raised following the ANZ Securities decision may be coming to pass. These developments may also portend a very complicated future for U.S. securities class action litigation, at least in the most serious cases. Alison Frankel’s October 29, 2018 post on her On the Case blog about the VEREIT opt-out settlements can be found here.
Continue Reading Do Opt-Out Settlements of $217.5 Million Foreshadow the Future of Securities Litigation?  

As I have noted in prior posts (most recently here), in recent months, allegations of price fixing have given rise to follow-on securities class action lawsuit filings against generic drug companies alleged to have participated in the price-fixing. All of these kinds of cases are examples of a securities litigation trend in which securities suit filings following in the wake of underlying antitrust allegations. In the latest example of this type of lawsuit, a plaintiff shareholder has now filed a securities class action lawsuit against McKesson Corporation, asserting securities claims based on the company’s alleged involvement in a scheme to fix prices for generic drugs. As discussed below, this new lawsuit has a number of interesting features.
Continue Reading Securities Lawsuit Filing Follows Generic Drug Price Fixing Allegations

In the latest example of a D&O lawsuit following in the wake of allegations of sexual misconduct, three shareholders have filed a state court derivative lawsuit in Oregon against Nike’s Board of Directors alleging that the defendants failed in their oversight duties and allowing a toxic “boys club” culture of sexual harassment and bullying to take hold. The Nike complaint shows yet again that the accountability process that has emerged as part of the #MeToo movement in many cases has involved efforts to hold company’s boards accountable for permitting misconduct or turning a blind eye. The Nike derivative complaint can be found here.
Continue Reading Nike Board Hit with Sexual Misconduct-Related Derivative Suit